As I viisited some of the MBs I could sense the despair, frustration and a sense of helplessness. No one except the very brave few are buying now. Are these very few stupid or shrewd? I don't know but I have been one of these very brave. I feel capitulation in the market especially for the enrgy investors. Yet I see some of sectors appeared to have bottomed out. The NG stocks and the service stocks appeard to have bottomed out in May. The oil stocks were the worst performers of late because a drop in oil. But the way the junior oils dropped, you think the world is ending soon. DOW, DOW transport and S&P500 are far above last October lows. So are our TSE and iTTEN. So why is such the end of the world feeling? It may be but the risk/reward favours me when the the valuations of some of the stocks are very compelling.
I parked some of my cash in VIX and PSN. I am gradually monetizing these stocks and use the cash to buy the junior oils. I have close to 40% wighting in PSN and will be reducing to say 30%. depending what are available in the market. This week,I bought BXE, DTX and TOL quite aggressively. I also picked up some PRY near close today. I also sold a large portion of ONR today.
No one will be able to tell what will happen to EU and Greece and I find odd that a lot of investors are speculating if they know.
What I know is when I wake up in the morning, I am happy to own 1bbl of oil or 1 mcf of NG in the ground at a fraction of the marginal cost of production or a substantial discount to its selling value today. This is a very simple investment philosophy. It wirjs for me and I can sleep very well as long as I know these bbl of oil or mcf of NG will not disappear with or without Greece in EU or even the disappearance of the whole EU. It is really that simple to me.